New Solar PPA Toolkit Lightens Load for Local Governments

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The Interstate Renewable Energy Council (IREC) has created a comprehensive toolkit addressing retail solar PPAs, in an effort to reduce solar soft costs and assist local governments seeking to install and finance rooftop solar systems. IREC’s new PPA Toolkit will help local governments and other public entities overcome common challenges and costs associated with PPAs.

“The PPA trend has definitely been a little rocky in some instances,” says Justin Barnes, policy research manager for EQ Research and co-author of the Toolkit. “Procuring solar under a PPA can be a complicated and time-consuming process. There are a lot things to consider and decisions to make, from how to design an RFP to select the most suitable provider, to establishing the terms of the contractual documents in a manner that allocates rights and risks in a mutually acceptable way. The details are often heavily negotiated, so a PPA deal in one jurisdiction can differ significantly from one in a neighboring locality.”

Prolonged PPA negotiations with significant transaction costs can ultimately deplete the value of the project for all participants, Barnes explained. This can be particularly troublesome for projects that are relatively small or that are financially compelling only if transaction costs can be minimized. Many early adopters encountered PPA challenges that resulted in delayed or even canceled projects.

“These past experiences provide valuable insights that can help other public entities avoid common pitfalls,” adds co-author Kathleen Kapla, of counsel with Keyes, Fox & Wiedman, “and can help them navigate the many contractual issues present in these legal arrangements.”

“The Toolkit is intended to provide local governments with the information they need to accomplish their solar procurement goals in a manner that suits their unique needs, and reduces the prospects for unpleasant surprises,” said IREC Regulatory Director Sara Baldwin Auck.

The Toolkit features:

  • Background information on the PPA model and the associated contractual elements;
  • Annotated model PPA and site right agreement documents, supplemented with numerous examples of how different provisions were addressed by individual local jurisdictions, and possible alternative language;
  • “Clean” templates that may be customized for local use (for informational purposes, with each user expected to seek independent legal and tax counsel);
  • General guidance on procurement design and implementation, also supplemented with numerous local examples;
  • Short case studies of individual projects surveyed and links to project documents; and
  • Summaries of existing resources, such as previously published reports and fact sheets, other model PPAs, and prior webinars.

IREC will hold a webinar on April 23 at 2:00 p.m. EDT to discuss the Toolkit and its resources, and to address public questions. Register here.

IREC’s Solar PPA Toolkit is a product of the Solar Outreach Partnership (SolarOPs), in coordination with ICLEI-Local Governments for Sustainability USA and with support from the U.S. Department of Energy SunShot Initiative. SolarOPs is designed to help accelerate solar adoption at the local level by providing timely and actionable information to local governments. SolarOPs achieves its goals through a mix of educational workshops, peer-to-peer sharing opportunities, research-based reports, and online resources.